Chances of Mass Student Loan Forgiveness May Have Only Increased



Borrowers hoping that President Biden will forgive student loans received a boost this week.

White House chief of staff Ron Klein announced yesterday that Biden had asked his education minister, Miguel Cardona, to draft a legal memorandum identifying potential authorities that could form the basis for broader action to forgive student loans through executive action. Cardona was tasked with exploring the possibility of forgiving student loans of up to $ 50,000. This new assessment of legal powers to cancel student debt will be carried out in conjunction with a separate legal due diligence that Biden has commissioned attorneys at the Justice Department to conduct.

This is a potentially important event. Student loan borrower activists, borrower advocacy groups and congressional progressives have pushed Biden for months to use his executive powers to forgive student loans. House and Senate Democrats issued a joint resolution urging Biden to write off $ 50,000 in student loan debt. The campaign has been joined by hundreds of human rights organizations, consumer and trade union advocacy organizations, as well as state and even municipal attorneys’ offices.

But Biden resisted. While he expressed support for the student loan forgiveness, he was not enthusiastic about using executive measures to bring about such a radical change in the student loan system. Many student loan legal experts have argued that Biden has the power to seek forgiveness for student loans using executive powers, but the Department of Education attorneys under former Secretary DeVos have come to the opposite conclusion. Meanwhile, Biden expressed deep uncertainty about the use of unilateral executive action.

In addition, Biden has consistently advocated for a smaller, “targeted” amount of student loan forgiveness – in particular, $ 10,000. In December, Biden said he was “unlikely” to cancel or forgive the $ 50,000 student loan debt. Proponents of canceling the $ 10,000 student loan argue that a lower level of forgiveness will target the poor. Forgiveness or Cancellation of US $ 10,000 Student Loans will eliminate all outstanding student debt for more than 16 million people, accounting for roughly a third of all current student loan borrowers. And that would cut the balances of another 9 million student loan borrowers in half.

But defenders argued that Biden needed to go much further. The fact that Biden is seriously looking into the viability of student loan forgiveness through executive measures is potentially a good sign for student loan borrowers. This may reflect the reality that Biden’s preference for Congress to pass a student loan forgiveness bill may be unlikely given the narrow Democratic majority in both houses, the expected Republican Senate filibuster, and the current focus on Biden’s infrastructure bill, which is likely will take months. Notably, Klein suggested that Biden was looking into legal bodies that would allow him to forgive student loans using executive action; Cline did not see the initiative as an attempt to find a legal basis for opposing such an effort.

In addition, the fact that Biden has commissioned the Department of Education to specifically look into the viability of forgiving student loans up to $ 50,000 may indicate the president is softening his opposition to more student loan forgiveness.

But nothing is guaranteed at this stage, and Klein indicated that a decision could be made in a few weeks or longer. Biden extended the moratorium on most federal student loans and interest payments until September 30, giving him enough time to act, and earlier this week he extended temporary relief to include additional student loans.

Advocates for student loan borrowers continued to push their campaign to persuade Biden to take drastic action, viewing student loan forgiveness as a racial justice issue. Inequality between student loan debt and learning outcomes disproportionately affects black and Hispanic students… Color graduate students with more student loan debt on average than their white peers, should more on your student loans even after many years of repayment, and more likely to default on their student loans.

“Canceling the US $ 50,000 student loan debt will provide a powerful boost to our economy, help narrow the racial wealth gap and lift a huge burden on millions of needy families,” Massachusetts-based Senator Elizabeth Warren said in a tweet. “President Biden must use his authority to #CancelStudentDebt.”

“If [the President] is serious about narrowing the racial wealth gap and needs to make a commitment to cancellation of student debt on a broad basis, ” said Rep. Ayanna Pressley (Massachusetts), one of the leading sponsors of a House resolution calling for Biden to cancel student debt. a loan of US $ 50,000 using enforcement action.

“The American bailout plan includes a clause that ensures that all student loan cancellations will not be taxed as income,” the Americans for Financial Reform tweet said, citing a section of the president’s recently passed incentive bill that supporters said , will be “pave the way»For massive student loan forgiveness. “Reforming student loans is about economic justice, gender justice, anti-racism and the way forward. #CancelStudentDebt “.

Further reading

Biden Initiates Additional Student Loan Aid This Week – But Borrowers Demand Complete Cancellation

72,000 borrowers will receive $ 1 billion in student loan forgiveness – are you eligible?

Will there be forgiveness on a $ 10,000 student loan after the Biden administration cancels $ 1 billion?

Congress Adopts Biden Incentive Act: 6 Takeaways For Student Loan Borrowers

Incentive Bill Provides Hidden Student Loan Tax Credit

Congress Makes Big Changes to Income-Based Payment Repayment: What Student Loan Borrowers Should Know

Senate Adopts Student Loan Tax Incentive Bill – “Will It Pave the Way” for Student Loan Cancellation?

Here’s everyone who wants Biden to cancel student loan debt (that’s a big list)

Whether Biden cancels student debt will depend on these three things

Could these student loan borrowers be excluded from Biden’s pardon?

Can Biden Cancel Private Student Loans? 3 options


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